Navigating the Complexities of Additional Insureds: Policy Language and Its Impact

Understanding the Importance of Additional Insureds

Underwriters often face requests to add additional insureds to policies, a practice that is crucial for companies to fulfill their contractual obligations. These requests are particularly common in the marine and energy sectors, but they also arise in construction and other industries. The inclusion of additional insureds typically involves commercial general liability, excess and umbrella, and other liability policies. However, the process is not without its risks; incorrect additions can lead to substantial losses for insurers.

Policy Language and Its Legal Implications

Maritime legal expert Harold “Hal” K. Watson recently conducted a webinar for the American Institute of Marine Underwriters (AIMU) on the proper addition of insureds. Watson, a partner at Chaffe McCall LLP, used detailed examples from actual cases, including the Deepwater Horizon disaster, to illustrate how policy language can significantly impact claims. He emphasized the importance of clear policy wording to avoid situations that could essentially give away an insured’s coverage. Watson also discussed the distinction between indemnity clauses and insurance policies, the need for caution when providing broad coverage for additional insureds, and the role of additional insureds in umbrella and excess liability policies.

The Growing Interest in Marine Insurance Education

AIMU has seen a growing interest in its educational offerings, particularly as it shifts from live to virtual events. According to AIMU President John Miklus, nearly 100 attendees participated in the “Additional Insureds” webinar, with a similar number attending a recent webinar on yacht insurance fundamentals. AIMU’s primary focus remains on educating its members and the broader insurance community, and it continues to deliver its programs using innovative methods. For those interested in staying informed, attending such webinars can provide valuable insights and practical suggestions for navigating the complexities of additional insureds.